Prime Minister Manmohan Singh termed his visit to Malaysia which concluded on Thursday afternoon a “turning point” in India's effort to integrate itself into the East Asia community, said senior officials.
The clinching of the Comprehensive Economic Cooperation Agreement (CECA) with Malaysia would help and encourage India seal similar economic pacts with Indonesia and Thailand, two other powerhouses of the 10-member Association of South East Asian Nations (ASEAN), they added.
“The CEPA with Japan and the CECA with Malaysia is clearly a very positive push to enhance India's engagement with this vibrant region — the East Asian Community,” noted Secretary (East) in the Foreign Office Latha Reddy.
Last August, India signalled its intention for political and economic alignment with the Asean by inking a Free Trade Agreement in Goods. Weeks earlier, it signed a CEPA with South Korea, which, however, is not an Asean country. This year has seen near-total agreements of this nature with Malaysia and Japan which were being negotiated for three and five years, respectively, pointed out Commerce and Industry Minister Anand Sharma.
India already has a comprehensive pact in place with Singapore and the prospects of pacts with Malaysia, Indonesia and Thailand mean it would have covered most Asean majors.
Besides, it has provided free market economy status to Vietnam. This would put India just behind if not level up with the original three partners of Asean — China, Japan and South Korea — who are processing the Comprehensive Economic Partnership with East Asia (CEPEA) with the Asean.
“The pact with Malaysia goes well beyond the India-Asean FTA in goods. India's successful negotiation of across-the-board access in services and movement of natural persons will ensure easy access for our professionals. India will also soon get access for its two-wheelers, textiles, cotton fabrics, trucks, fruits, eggs and Basmati rice. It will also permit higher FDI in construction and hospitals. Malaysia has demonstrated its commitment to develop economic engagement with India,” Mr. Sharma said.
The pacts with Japan and Malaysia, he was confident, would help take India closer to the objective of a closer Asian economic community. Bilateral trade with Japan is slated to rise to $20 billion and to $15 billion with Malaysia in five years.
Other initiatives
Officials explain that India is proceeding with other Asean countries through other initiatives. It is integrating Myanmar, the least developed in the grouping, by the South Asian Association for Regional Cooperation by giving it a special status. Laos and Cambodia are being engaged through the Mekong Ganga Initiative. That leaves just the Philippines and the oil-rich Brunei.
“The pattern of India's engagements with the Asean and its extended neighbourhood will help in taking us closer to the Prime Minister's objective of an Asian economic community,” said Mr. Sharma.
